Thursday 21 June 2001 20.14 EDT
First published on Thursday 21 June 2001 20.14 EDT

Based on a 26-page picture book featuring an elegant text and some lightly drawn illustrations, the large-scale DreamWorks interpretation of William Steig's Shrek! is superficially a different creature altogether. Apart from losing Steig's exclamation mark, the movie Shrek is very much founded in the world of children's stories, with its frequent references to the three little pigs, Pinocchio and the three bears, as well as to the Disney characters of Snow White and the Seven Dwarfs, Cinderella and Sleeping Beauty. The original Shrek! book was, however, heavily overlaid with smart-mouth jokes and an eye to the crossover children-adult market that has recently made so fashionable through the Harry Potter series.

And yet, lurking within DreamWorks's hi-tech production, with its mindblowing array of techniques, the bare bones of Steig's storyline are discernible; the oddly-angled humour and the themes that were so important to Steig also remain largely intact.

Steig's gift as a creator of picture books is his laconic humour and his use of the art of understatement. An American born in 1907, he began his career in 1930 when he became cartoonist and cover designer for the New Yorker. His first children's book - Roland, The Minstrel Pig - was published in the US in 1968 when he was 61, though it wasn't picked up in the UK until 1974.

It was in the 1970s and 1980s that Steig enjoyed his brief success in this country, having won the prestigious Caldecott medal for illustration in the US in 1970. Several titles followed - Sylvester and the Magic Pebble, Amos and Boris, Dominic, Abel's Island, The Amazing Bone, and Doctor De Soto - some of which appeared only briefly before going out of print.

Animals with human characteristics feature regularly in Steig's stories - a familiar picture-book device that allows truths of human nature to have a universal appeal. He also frequently draws on fairy-tale themes of wish fulfilment and friendship, both much in evidence in Shrek! While urbane and witty, Steig's writing remains elegant and literary; his loose, cartoony illustrations leave much to be imagined by the reader. The view of people and events is a benign one that encourages children to take a sophisticated view of the world around them.

First published in the US a decade ago, Shrek! is the story of an ugly monster who revels not only in his ugliness but also in the damage and destruction he can cause. His worst and most horrible dream is to find himself being kissed by children who are playing around him. Set on a journey by a haglike witch who promises him a princess to marry, Shrek travels through a series of unrelated episodes - including defeating a dragon and a knight and befriending a donkey - to reach the princess. Her ugliness matches his own, and in a gruesome embrace they betroth their love and get married.

So far, so quite like the film. And many of the themes - the friendship between Shrek and the donkey, and above all the princess remaining in her ugly, bewitched state because that is beautiful to Shrek - are in the film, too. But the balance is different and the message has been subtly altered. Steig aimed his book at young children, whose greatest need is for parental love to be unconditional; it tells them that accepting yourself for what you are is of the utmost importance. Shrek remains true to himself, and the hideous, warty princess does too.

The defining moment for Shrek - "foul and fearless" - is when he sees himself reflected hundreds of times over in a hall of mirrors and recoils at the ugliness of the monster he is facing. But once he realises that they are all himself, he faces the truth "full of rabid self-esteem, happier than ever to be exactly what he was" - the perfect reassurance for a pre-school child.

Shrek and the princess marry and go about behaving exactly as they did before, "and then they lived horribly ever after, scaring the socks off all who fell afoul of them"- which licenses the child reader to do the same.

In the film adaptation, however - even with a U certificate - the love dynamic has been made romantic. Shrek and the princess are both lovable to the outside world because their love for each other renders them beautiful. Shrek is changed by his love: the implication as they slip away in the pumpkin coach is that he will be a cleaner, more socialised creature from now on. It is a message of social acceptance - not the narrow focus of parental acceptance that so often provides the glue for a picture-book story.

Subtle shifts of emphasis such as these are inevitable, as is the loss of Steig's brilliant wordplay. Producer John H Williams found Shrek! through his own children, who could quote great chunks of the text long before they could read. They were particularly fond of Steig's terse phrases, such as Shrek's exchange with a peasant: "Pheasant peasant? What a pleasant present!"

There's also the wittily fractured donkey-speak: when Shrek asks the donkey if he is taking him somewhere, the latter replies, "I am. To the nutty knight. Who guards the entrance. To the crazy castle. Where the repulsive princess. Waits." It's a brilliant device, carefully designed to amuse listening children.

Steig's success as an author in the UK lasted only a decade or two and he never achieved the popularity that he had at home. Like many other US children's illustrators and authors, the fine art of understatement seemed largely lost on the UK market. That may change now that the book is available again here.

The most noticeable difference, as is the case with most film adaptations of children's stories - such as Winnie the Pooh and more recently EB White's Stuart Little - is that irony is hard to lift off the page. The slower pace of books makes for a richer experience: certainly the message of the book is more empowering to children. Sadly, that slower reward may never now be attained, as the novelisation of the film, the scratch-and-stink storybook and the Shrek gag book will have a far more immediate impact.

Shrek is released next Friday. William Steig's Shrek! has been reissued (Puffin, £4.99).